Site Mobile Navigation

New Home-Buying Plan May Bolster Abbas

Tony Blair, left, with the Palestinian president, Mahmoud Abbas, on Monday at the announcement of a home loan plan.Credit
Muhammed Muheisen/Associated Press

RAMALLAH, West Bank — The Palestinian West Bank, besieged by Israeli occupation, political division and weak leadership, got a boost on Monday: the announcement of a plan, led by the American government, to help tens of thousands of people buy homes.

The plan, which establishes a $500 million mortgage company, aims to build 10 new neighborhoods over the next five years and, in the process, create thousands of jobs in construction and real estate. In doing so, it could improve the depressed local economy and the political prospects of the Palestinian president, Mahmoud Abbas, of the relatively pro-West Fatah party.

Mr. Abbas, who has been engaged in peace talks with Israel’s prime minister, Ehud Olmert, will be in Washington next week to see President Bush, who hopes to have a Palestinian-Israeli peace outline before his term ends.

A secondary aim of the housing program is to send a message to the Gaza Strip, run by the Islamist party Hamas, that its citizens, too, could benefit from international generosity and economic progress if they restore Fatah’s authority, overturned by Hamas forces in a battle last June.

“We believe this gives the Palestinians of Gaza a reason to try to change the status quo,” said Mohammad A. Mustafa, chief executive of the Palestine Investment Fund, which runs the new program. “Something good could be in store for them besides their ongoing nightmare.”

Palestinian officials say that in the next decade, 470,000 new homes will be needed in the West Bank and Gaza, and that 75 percent of the population is without affordable housing. The new plan will make mortgages available for about 30,000 apartments.

Some 2.5 million Palestinians live in the West Bank, along with about 250,000 Israeli settlers. Israel also holds large parts of the area for security. An additional 1.5 million Palestinians live in the Gaza Strip, which Israel evacuated in the summer of 2005.

Half of the money for the new mortgage company, $250 million, will come from the United States through the Overseas Private Investment Corporation. The rest will be from the Palestine Investment Fund, the International Finance Corporation of the World Bank and the Bank of Palestine, with a smaller contribution from the British government.

An error has occurred. Please try again later.

You are already subscribed to this email.

At a ceremony in Ramallah, Tony Blair, the former British prime minister who is representing the international community in helping the Palestinian Authority build institutions, called the plan “a major step forward for ordinary Palestinians.”

This is the second major international initiative of its kind in the West Bank. Last summer, $230 million was pledged for a similar program for small- and medium-size businesses in the area.

Robert Mosbacher Jr., the president of the Overseas Private Investment Corporation, which was also involved in that endeavor, said about half a dozen loans had been made so far in that program. He said he hoped that the first construction in the housing plan would start this year.

“Our role is to deploy private capital as a soft power tool,” Mr. Mosbacher, a businessman from Texas, said after the ceremony held to announce the program.

Mr. Abbas, the Palestinian president, said in his speech at the ceremony that he wished the new projects could apply to the Gaza Strip but that what he called the coup d’état carried out there made it impossible. He condemned the shooting of rockets at southern Israeli communities from Gaza.

Also on Monday, former President Jimmy Carter, who is on a Middle East tour, visited two of those communities, Sderot and Ashkelon. Although Mr. Carter brokered the first Israeli-Arab peace treaty, with Egypt, when he was president, many Israelis view him as hostile. Most of Israel’s leadership, including Mr. Olmert, Defense Minister Ehud Barak and Foreign Minister Tzipi Livni, declined to meet with him.

Mr. Carter did see President Shimon Peres, who nonetheless criticized him for his plan to meet with the exiled political leader of Hamas, Khaled Meshal, in Damascus, Syria. Israel and the United States are trying to isolate Hamas because of its terrorist activities and its refusal to accept Israel. But Mr. Carter has argued that without Hamas’s involvement, there cannot be peace with Israel.

A version of this article appears in print on , on Page A10 of the New York edition with the headline: Housing Plan, With U.S. Aid, May Aid Abbas in West Bank. Order Reprints|Today's Paper|Subscribe